Thu, Oct 24, 2013 - Page 13

Net profits more than doubled to NT$7.29 billion (US$247 million) in the quarter ending on Sept. 30, compared with NT$3.47 billion in the second quarter.

Revenue expanded 33 percent quarter-on-quarter to hit an all-time high of NT$16.94 billion last quarter. However, shipments only grew 7 percent during the same period.

Inotera expects the resilient growth momentum to extend into this quarter as chip prices are set to rise further, thanks to growing demand for memory chips for severs and continuous supply constraint after a fire in a SK Hynix Inc plant in China’s Wuxi last month.

That will pave the way for Inotera, a memory manufacturing venture between Micron Technology Inc and Nanya Technology Corp (南亞科技), to post new records for quarterly net profits and revenue for this quarter.

“We believe the fourth quarter will be better than the third in terms of profit and revenue,” Inotera chairman Charles Kau (高啟全) said.

Average selling prices will likely rise further this quarter on the back of short supply after the Hynix fire, Kau said.

He expected the impact to carry into next quarter.

The price increase would be supported by growing demand for memory chips used in non-PC products, according to Kau.

He said the company would hit its target of boosting revenue contribution from memory chips for non-PC products to 65 percent of its total revenue at the end of this year.

This year, Inotera budgeted NT$8 billion for new equipment and the figure is forecast to rise next year as the company plans to start conducting pilot runs of next-generation 20-nanometer technology in the second half of next year.

The company attributed the growth in net income to price increases and an asset gain of NT$1.83 billion from Inotera.

Nanya’s net profits grew to NT$1.98 billion following a 6.8 percent price increase and after booking NT$1.8 billion in asset gain from Inotera.

“We believe chip prices will continue to rise in the fourth quarter from the third quarter,” Nanya vice president Lee Pei-ing (李培英) told reporters.

Nanya revenue could grow by a double-digit percentage this quarter, from last quarter’s NT$11.46 billion, offsetting lukewarm seasonal demand, he said.

"Gross margin will continue to improve too," Lee said.

He said the growth would be supported by continuous asset gain from Inotera and growing contribution from memory chips for non-PC products primarily for consumer electronics such as smart TVs this quarter.

Memory chips for non-PC products accounted for 66 percent of the company's total revenue last quarter, from 55 percent in the second quarter, according to Nanya.

Gross margin returned to positive territory at 13 percent last quarter, compared with negative 4 percent in the second quarter excluding the inventory gains, the company said.